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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Location: Northwest Arkansas, United States

Wednesday, July 04, 2007

Chapter Four Draft

Chapter Four: Systemic Effects of State-Induced Economic Centralization and Large Organizational Size


Anonymous Foreign mutualist said...


What do you think about the agenda propossed by Adams and Brock in "The Bigness Complex"?: Economic decentralization, economic power dispersion, controlling mergers and acquisitions, deregulation, antitrust enforcement, free competition, ... (316, ...).

Do you think it would be enough against big corporations?

And then, if downsizing the Government gets down with big corporations, how do we know that they would be substituted by mutualist associations and not by small and medium investor owned -capitalist- enterprises?

Thank you very much,

Foreign mutualist

August 28, 2007 1:50 PM  
Blogger Kevin Carson said...

Adams and Brock are a great source for a lot of useful information, but I don't think their analysis is entirely consistent. For one thing, they blur the distinction between government encouragement of size through active intervention, and "encouragement" of size by failing to intervene enough *against* size. They seem to be at odds with themselves, at some times treating the size of the dominant corporations as the result of state intervention, but at others suggesting even more intervention is necessary to prevent such large size.

IMO the interventionist aspects of their agenda (anti-trust) would be irrelevant if the government just stopped actively promoting large corporate size. Just to take two examples, funding the Interstates and airports entirely by cost-based user fees, and eliminating "intellectual property" [sic], would by themselves go a long way toward eliminating oligopoly entirely. Either eliminating the corporate income tax entirely, or at least eliminating differential tax advantages and then lowing the rate to make it revenue-neutral, would also have a huge effect.

My guesstimate of the effects of removing corporate subsidies is that both smaller investor-owned enterprises *and* cooperatives would increase as a proportion of the economy. Either one would be a vast improvement over the present. But the absentee owned enterprises would be a lot closer to some form of the "liberal firm," with higher pay and more worker autonomy and control over the work process, because of the increased bargaining power of labor.

September 02, 2007 11:36 AM  
Anonymous Foreign mutualist said...

Thanks, Kevin.

I just don't understand very well why supressing corporate profit tax would be so interesting against corporations. IsnĀ“t it supposed to tax corporations? Shouldn't they be more taxed to compensate their costs externalisations?

Foreign mutualist

September 02, 2007 1:38 PM  
Blogger Kevin Carson said...

Well, as to their excess profit, I'd rather go directly at the root causes--i.e., state intervention--of those excess profits, rather than add another layer of intervention to trim them back down.

But in practice, I don't think the corporate income tax does this in any case. The main effect of the corporate income tax is to act as a cartelizing device, heightening the difference in privilege between the state capitalist sector and the competitive sector.

First of all, oligopoly firms in the state capitalist sector are more able to administer prices on a cost-plus markup, and simply pass along corporate income tax to the customer.

Second, after the assorted differential tax benefits (the interest deduction on corporate debt, capital depreciation, and the R&D tax credit), the most favored corporations pay little or no tax (those in capital-intensive, high-tech industries, that are heavily engaged in mergers and acquisitions). So the corporate income tax falls in practice mainly on the competitive corporate sector; its practical effect is exactly the same as if you started from a corporate income tax rate of zero, and then imposed a punitive tax on everybody outside the state capitalist sector of the economy.

September 03, 2007 11:05 AM  
Anonymous Foreign mutualist said...

Thanks Kevin. I think I understand your point.

So corporate profit tax may be another way of promoting big corporations and oligopoly firms.

What about small enterprises? How the state capitalism promotes these enterprises being investor owned and not mutuals, coops, ...?

Is it because of capital scarcity that promotes the role of capital investors as owners?

September 03, 2007 1:41 PM  
Blogger Kevin Carson said...

Yes, that's it exactly IMO.

September 03, 2007 5:24 PM  

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